Oversea-Chinese Banking Corp (OCBC) posted a 22% rise in second-quarter net profit to a record S$2.22 billion, beating expectations as stronger fee, trading and insurance income helped offset pressure on lending margins.
The result for the April-June quarter was ahead of the S$1.93 billion average estimate from three analysts surveyed by LSEG.
OCBC, Singapore’s second-largest bank, also raised its 2026 loan growth outlook to high-single-digit to low-double-digit growth from its previous forecast of mid-single-digit growth.
The bank expects total income to grow this year despite a slight decline in net interest income. Its cost-to-income ratio is expected to remain at the low 40% level while credit costs are forecast at 20 to 25 basis points.
The stronger earnings came despite OCBC’s net interest margin, a key measure of lending profitability, falling to 1.70% in the second quarter from 1.92% a year earlier.
The bank declared an interim dividend of 47 Singapore cents per share, up 15% from 41 cents a year earlier, while return on equity improved to 14.4% from 12.3%.
OCBC maintained its 50% ordinary dividend payout ratio and said it remained committed to completing its S$2.5 billion capital return plan by the end of 2026.
OCBC CEO Tan Teck Long said the bank remained alert to uncertainty stemming from the Middle East conflict and energy markets, alongside uneven economic growth across major economies.
However, he said OCBC’s strong capital, funding and liquidity position would support growth while providing a buffer against uncertainty.
The results come as investors watch how banks manage interest-rate pressure and whether wealth management, transaction banking and markets income can continue to make up for narrower lending margins.
OCBC’s earnings were also part of a broader strong showing by Singapore’s banks, with larger rival DBS reporting a 9% increase in second-quarter net profit a day earlier.
